The Boeing Company (NYSE:BA) stock remains richly valued, despite escalating, fundamental headwinds

The Boeing Company (NYSE:BA) stock remains richly valued, despite escalating, fundamental headwinds

The Boeing Company (NYSE:BA) stock remains richly valued, despite escalating, fundamental headwinds

It’s been a rough month for Boeing (NYSE:BA). stock There has been a storm of controversy surrounding the company following two very similar, fatal crashes involving Boeing’s 737 Max 8 planes.

This controversy has left investors in a “sell first, ask questions later” mood when it comes to Boeing stock, and BA stock has shed nearly 20% in March alone.

Momentum traders are telling investors to stay away from Boeing, warning that BA stock is a falling knife that’s still waiting for the other shoe to drop. Meanwhile, contrarian investors are saying that  now is the time to get aggressive on Boeing stock. Their logic is that this is a solid,company with a positive, long-term growth outlook going through a rough patch which has left shares underappreciated in the near-to-medium term.

Who is right about Boeing?  I have to side with the momentum traders. Before the selloff, Boeing stock was very richly valued, and BA’s stock price did not reflect  any possibility of bad news.

Recently, Boeing has had nothing but bad news, ranging from bad press to order cancellations to criminal probes to slowing economic growth concerns. Boeing stock has consequently dropped tremendously. But it’s not back to its normal valuation levels, and until that happens, I wouldn’t consider buying BA stock.

There will come a time when this dip in Boeing stock is worth buying. But that time is not today. This stock will fall further before it turns around.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 393.27.

The projected lower bound is: 348.19.

The projected closing price is: 370.73.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 31.8441. This is not an overbought or oversold reading. The last signal was a buy 7 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 36.85. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 1 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -53. This is not a topping or bottoming area. The last signal was a buy 7 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 16 period(s) ago.

Rex Takasugi – TD Profile

BOEING CO closed down -0.080 at 370.380. Volume was 13% below average (neutral) and Bollinger Bands were 71% wider than normal.

Open High Low Close Volume___
375.450 375.590 367.600 370.380 1,094,120

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 372.70 393.43 359.10
Volatility: 28 37 37
Volume: 2,413,840 1,387,593 982,704

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

BOEING CO is currently 3.1% above its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of BA.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on BA.N and have had this outlook for the last 10 periods.

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